Prolonged Demand Dullness Puts Pressure on Linear Alkylbenzene Sulfonic Acid Prices in Europe

Hamburg (Germany): Linear Alkyl Benzene (LAB) and Linear Alkyl Benzene Sulfonic Acid (LABSA) prices in the European market have been performing poorly since the start of the fourth quarter of 2022 owing to the weak performance of the downstream detergent sector. The easing of upstream Benzene prices in the domestic market assisted the declining price trend of LAB and LABSA in major European countries.

Upstream Benzene cost in the domestic market eased due to the European region's high inventory levels despite the reduced operation rates, assisting the LAB and LABSA price downtrend. The wait-and-buy approach opted for by end-users due to the fear of looming recession prompted producers to decrease the prices of LAB, LABSA, and upstream Benzene in the domestic market. High energy costs in the region forced several industries to cut production, resulting in decreasing demand for surfactants like LABSA and causing a decrease in the prices of the commodity.

Nearly 8900 Jobs were lost in the European detergent sector till the first quarter of 2022, which is 7% of the total workforce of this sector. The Jobs lost are reflective of the prolonged weak state of the downstream detergent sectors in several European countries and are leading to a poor demand situation for LAB and LABSA. The current condition of the downstream detergent sector witnesses no prospect of improvement due to the holiday season, further abetting the declining price trend of LAB and LABSA in the European region. The recent rise in European upstream Benzene prices could not increase the cost of LAB and LABSA in the European markets.

According to ChemAnalyst, the prices of LAB and LABSA have been on a downtrend since the start of the fourth quarter of 2022. The prices of the products are expected to continue their bearish run for the rest of this year despite the current increase of upstream benzene costs due to the anticipated weak demand during the holiday season and Year-end destocking.